Interest Charged Incorrectly on Barclaycard

pink1234_2

I have a £3000 0% balance transfer on my Barclaycard. The last two months i have also spent on this card but have cleared the 'purchase' amount in full and on time therefore leaving just the 0% bit. Both months BC have charged me interest although when i have queired it they have admitted it was incorrect and refunded. However nobody at BC can expain why and the last person actually said it was a 'system error that occurs when a card with a balance transfer is also used for purchases'
They now say they cannot guarentee it wont happen again (although admit its wrong) and will not refund any further interest.
Help - anyone any ideas as the whole pupose of the balance transfer was to stop getting interest charged .
Thanks

YorkshireBoy

It's a quirk of the new payment order.

Both your balances (the BT and the purchases) attract interest at the prevailing rate. Only if you pay your full bill by the due date do they waive the interest. You haven't paid your full bill so have lost the 'up to x days interest free' on purchases.

The amount of interest being charged should be very small though isn't it?

pink1234_2

oh ok thanks - this month was £57 interest(BT of £3K then purchases of £1944)
So it doesnt pay to use card with BT even if your going to clear the monthly purchases - although i suppose if i clear it earlier in the month rather than 'due date' it wont hapen ??

YorkshireBoy

I suspect next month's interest will be much lower...just a little bit of trailing, or residual, interest.

It's probably down to a timing issue. Had you paid off the purchases balance before the last statement date of the 3 months intro purchases rate (if that makes sense?) then I suspect you wouldn't have incurred the interest in the first place.

chattychappy

YorkshireBoy's analysis is correct. (As usual.)

pink1234 wrote: »

oh ok thanks - this month was £57 interest(BT of £3K then purchases of £1944)
So it doesnt pay to use card with BT even if your going to clear the monthly purchases - although i suppose if i clear it earlier in the month rather than 'due date' it wont hapen ??

The "due date" is irrelevant except as a deadline for payment arriving. Interest is calculated from transaction date. So unless you clear the whole balance in full, you will always get some purchase interest.

Whether it is worth using this card for purchases depends on what else is going on with your finances. If you are paying purchase interest elsewhere, then it can be worth putting purchases on this card - even if the purchase rate is higher here. The maths is complicated, but the reason is that your minimum payment will be applied to the purchases first. By NOT putting purchases onto this card, all of your payment will go against your 0% promotional balance. If you shift enough purchases to "soak up" the minimum payment, you will pay only 1 to 59 days (or whatever) purchase interest on this and then it gets paid off in preference to the promotional balance. So overall you end up with more of your total borrowing on the promotional rate.

To optimise this, you should make those purchases just before the statement date and make your payment as soon as possible afterwards. (Some cards apply payments to statemented transactions ahead of unstatemented transactions regardless of the applicable interest rates.)

Of course none of this applies if you can pay off your purchases in full each month and don't have purchase interest running elsewhere. In this situation it is better to keep purchases off the Barclaycard and pay no interest at all.